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US asks Pakistan to honour commitments on tax measures

Discussion in 'Pakistan Economy' started by Cityboy, Nov 30, 2010.

  1. Cityboy

    Cityboy FULL MEMBER

    Feb 16, 2010
    +0 / 487 / -0
    KARACHI: Washington and donor agencies want Pakistan to honour its commitments on new tax measures.

    This was stated by US Coordinator for Economic and Development Assistance to Pakistan Robin Raphel here on Monday at a media briefing on US development initiatives, after interacting with a delegation of Muttahida Qaumi Movement (MQM), a major coalition partner which is an outspoken opponent of the reformed general sales tax.

    She said the Obama administration was trying to convince the Republican dominated-House of Representatives on disbursement of assistance to Pakistan in a transparent manner.

    Answering a question about the controversial tax measures, she said that looking at Pakistan’s finances that is 9 per cent of revenue to GDP ratio, the government had to do something to enhance and broaden its revenue collection. “There are lots of ways to do that but Pakistan now has an agreement with the IMF which calls for this reformed GST and since it is our position that countries, whether Pakistan or anybody else, should live up to their international agreements, we would like to see this legislation passed,” Ms Raphel remarked.

    “We and all the donors are very keen that Pakistan is able to stay in its arrangement with IMF because that it is very important and will facilitate our argument in the Congress for providing funds for Pakistan,” she said.

    About transparency and accountability of disbursement of $7.5 billion aid over five years, she said the US had set up a series of benchmarks and safeguards in each project in order to track the money.

    “Before we can provide funds directly to any institution they have to go through a kind of audit by a third party that we retain to see how they do their accounting and see what issues that might be with their practices,” Ms Raphel said.

    These measures, she added, were meant to ensure that the funds were going in a special account and were not blended with the budget of the government.

    They were retained in a special account whether at the federal, provincial, or the district levels. “So we believe that we can track the fund.” she emphasised.

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